My favourite columnist, Mom2KG, wrap up her year of blogging with a summary of what her family has learned about investing this year. We are also happy to announce that she is returning in 2009 to continue to share her story with us (I need a better brand for this column though. Thoughts?). Without further ado…

Twelve months of living and learning, on my own, from Mr. Thicken My Wallet himself, and from you. Thanks to all of you who read my trials and tribulations, offered support and posted thoughtful comments.

In a recent, old-fashioned, face-to-face with TMW, we decided I would keep posting in 2009, though perhaps expanding my purview into personal finance lawyers generally. Since I’m sure you’re all sick of hearing me whine about my husband’s ‘tude towards money (or, more accurately, my ways of spending it), this might be a welcome change. However, I’ll also keep you up-to-date on significant personal fiscal issues.

As a year-end wrap-up, here are the Top 5 Things I’ve Learned:

5. Personal Finance is not Easy

At the beginning of 2008, much of the personal finance “stuff” was low-hanging fruit, and seemed easy. The introductory books are written for anyone who can pass tenth grade, and they all seem to pick a mantra, and say it ten different ways. The mantras seem easy to implement but are hard to stick to in the long term. Things like “have a weekly meeting” and “keep track of your spending” sound doable, but are in fact hard to stick to. And, well, boring. My blog also focussed on a family’s journey, and it became very demoralizing for both my husband and I to have the same arguments every week, even as we made progress.

4. Personal Finance is not Hard

The low-hanging fruit noted above is a good 50-75% of what every person and family needs to do. Even implementing one or two good finance habits go a long way. How hard it is to read a blog or two a week? Or schedule quarterly meetings with your financial advisor? Or even save your receipts in one place? Not hard at all.

3. Personal Finance Yields Results

While my husband and I still have a long way to go on ever agreeing on a budget, we’ve seen significant returns on our 2008 plans. Perhaps most importantly, when the fall crisis hit, we were able to react quickly, diverting some investment income into mortgage prepayments. We have reduced our amortization period even further, and are now on track to pay the whole thing off before the term is up.

2. Personal Finance is Personal

I won’t take credit for this one. Many readers drummed this into me with comments over 2008. My personal finance advisor, even on his best days, can never care as much for my retirement plans as I do. So it’s up to us to review his work, research the markets and the products, and take charge of our portfolio.

1. Personal Finance is Long-Term

My husband dreams of living in poverty (yes, one last dig) for the next several years so we can retire super-early. Not my style, but we’re compromising. No matter how we slice it, we have a finite income and a finite amount of time to prepare for our future. Even if we accumulate some magic amount of money, we’ll still have to manage it appropriately in retirement. We are coming to the conclusion that this is not short-term pain for long-term gain. It’s a completely different animal, requiring constant, though not intense, care and attention, forever.

With that, happy holidays and happy New Year! Best wishes.

My regular columnist, Mom2KG, returns this month perplexed about her financial advisor. You have any advice? Please feel free to share. If you are new to this blog, please visit the Mom2KG section to catch up. Thanks.

It may not come as a surprise to anyone that the market meltdown has paralyzed us with fear. Mostly my husband, of course, who sees money draining away with every move I make. I even use too much toilet paper, apparently.

We’re doing a few things differently.

First, we increased the mortgage payments again. If we stick to our plan, we’ll have the whole damn thing paid off before the term is up, which means we won’t have to worry about the anticipated soaring interest rates. Second, I created automatic deposits into my RRSP account, but instead of spreading the deposit among different investments, I’m just putting it in cash for now.

Perhaps the best thing we’ve done is have me responsible for a large, fixed portion of the credit card bill every month. I have to admit this has made me pause once or twice before making a purchase. The account I pay out of is now a joint account, but until recently was only in my name. Even now I’m the only one using it, and I rather like seeing the cash balance.

Oh, I also finally got the President’s Choice Master Card, and we’re going to say bye-bye to the stupid Aerogold Visa. It costs $200 a year (for the primary cardholder plus a secondary card), and points do not seem to accumulate fast enough for us to be able to purchase flights. In addition, certain charges are not covered by the points, and so flights end up costing a few hundred dollars anyhow. Then we’re also stuck with Air Canada, which is not known for point flexibility. The program does offer merchandise as well, but we had really wanted the flights, and we don’t need more stuff. The PC card will allow us to set off the cost of groceries – always an issue with us.

One last thing – we are reviewing our choice of financial advisor. It’s a one-stop shop kind of place. I recently purchased term life insurance there. The original estimate turned out to be wrong, by close to 50%. It was a simple oversight – the broker had all the information but gave me the wrong info when we first spoke. I was pretty irritated, but signed the contract anyhow, because the final price was still acceptable, the contract is non-binding, and I’ve been trying to get this done for almost a year. But it’s just one more thing that’s rankling with us. We know everyone has lost money in the last several weeks, but were our portfolios properly diversified? Why had the advisor never mentioned REITs? Why did we have to push on getting an explanation about ETFs? Why is there so much redundancy in the portfolio? Why has no one talked to us about short, medium and long-term planning? We have very specific goals – isn’t that what we should be talking about?

What do you look for in an advisor? We need someone who will actively inform us of the greater implications of our investments, at least quarterly (right now we’re getting two calls a year, though we did get calls and e-mails around the time of the market frenzy). We want someone to educate us in the variety of investment possibilities, not just stupid mutual funds. We want someone to take an interest in our life and family goals and think about, and tell us, a strategy to get there.

As a post-script on yesterday’s post about Canadian banks and dividends, TD announced it is issuing $1.2 billion of common shares for the primary purpose of boosting its capital adequancy levels (this refers to the amount of money a bank must set aside). A good, bad or indifferent sign? Only time will tell…

Our regular columnist, Mom2KG, is back for her usual monthly check-up. As usual, she appreciates any comments you may have.  Her columns are now collected in her own category; if you are a new subscriber,  I encourage you to read all her posts.

A number of your comments have asked for numbers as to my budget. I’m way too embarrassed for that, but here’s something almost as much: my investments, in percentages. TMW has already spat on them [TMW note: I didn't spit on them, more like kicked dirt on them- see below], but here’s your chance to put your own knowledge to the test.

Of my investments (not including home equity), the percentages are:

Cold hard cash (sitting in a bank account waiting for your suggestions) - 35%

The rest is held inside an RRSP account at an investment house, classified as follows:

Short Term Fixed Income

• “Stable Income” fund – 10%

Cash

• Actual cash - >1%
• “Money” fund – 7%

Canadian and Foreign Fixed Income

• 5-year GIC @ 4.47% - 10%

Foreign Equity

• “American Growth” fund – 2%
• “Growth” fund – 10%

Canadian Equity

• Corporate stock – 1%
• Bank stock – 8%
• “Select” fund – 4%
• “Equity” fund – 13%

Well, have at it and enjoy. What are your preferred weightings? What’s missing (e.g., there are no REIT’s)?

Also, I’m going to begin a monthly direct deposit lump sum into my investment portfolio each month. I’ve decided to put 66% of that into safe, low-risk investments, and the rest (33%) into ETFs and stocks, just for the fun and risk of it, and for learning purposes. Comments on that plan are also appreciated.

Looking at the above, I realize to some chagrin that I understand all of the above, with the stand-out exception of the mutual funds – 46% of my total investments! That’s a pretty big gap in knowing where my money is and what it’s doing. I have no idea what’s held in those funds (except some are foreign/American and some are Canadian) or what their purposes are. And those funds are where most of my money is – and, of course, what the investment advisor recommended. The MERs, however, are low: mostly about 0.5%.

When I mentioned to the advisor my plan to put money into ETF’s, he gravely warned me of the (flat) trade fee – made a big deal about it. Turns out such a fee would be 0.029% of my overall portfolio (including the cash outside his domain in my bank account). Hm. Doesn’t seem like that big a deal – was he trying to scare me off investments that wouldn’t make him any money?

Thanks in advance!

P.S. I went to the Crate & Barrel opening in Toronto with TMW himself. I want you to know he was fomenting marital discord by insisting I buy things that would wreck the family budget. Bastard convinced me, too [in my defense, the opening was for charity and I merely remarked that the bed-sheets were nice so if you need to have bed-sheets, you may as well aid charity as well. That's my story and I am sticking to it!]

TMW says- as for the “spitting” on the portfolio remark, I mentioned there may be some overlap in the mutual funds and there is a large under-exposure to foreign equity. I also thought that her advisor was unnecessarily pushing her into mutual funds without sorting out potential redundancy issues.

Our regular columnist , Mom2KG, checks in with her monthly column. As per your request, I have (finally) given Mom2KG a well-deserved category of her own. As usual, comments are highly encouraged from readers.

Thanks so, so much to everyone who posted with their thoughts on my July post. As always, there were lots of good suggestions, but the encouragement really helped me.

We have gone to see a new financial advisor, recommended by our tax guy. He was certainly nice, but he didn’t wow us with anything exciting. And he’s leery of real estate investing (as was a poster from July), something we’re interested in, so he may not be the guy for us. (Caveat – yeah, I know I’ve mentioned this ad nauseam and never seem to get anything done about it. It’s been a busy summer, okay?) But he’s going to draft a plan for our review. He sang the same old song of long-term conservative investing being the best bet. Ho hum. (Not to mention, my husband has had his RRSPs in super-low-risk mutual funds for fifteen years, and his portfolio is worth only slightly more now than at inception. We only have so many 15-year increments in our investing careers, and can’t afford another one like that. How long is long-term?) Are we expecting too much? Should all investments be self-directed? We are actually moving that way, and will soon consider ditching all mutual funds.

Very interesting comments on what people out there count as savings. I am all for counting RRSPs, RESPs (there was some dissent on that) and the extra mortgage payments as savings – it’s all part of net worth, right? Seems straightforward to me. Tell me how to convince my husband. He refuses to count anything other than cold hard cash sitting safely in a high-interest bank account as savings. I went online and did a comprehensive net worth statement, and showed it to him – he made a pfffft sound which I interpreted as “I am entirely dismissing your attempt to argue a financial point other than my own. Your so-called net worth statement is nothing to me, woman.”

I suppose this is why TMW asked me to blog on this as a family matter – how do two people, both well read and reasonably informed, working towards the same goals, sort out issues like this? This is, I will say, exceptionally frustrating. I was, as I noted last month, disappointed not to have met our savings goals (as in cold hard cash), but as many readers pointed out, we’re doing quite well with other forms of money management and allocation. My husband cannot seem to accept this, grieving anew each month. (I am, of course, utterly blameless in our financial sins- statement made with tongue firmly planted in cheek.)

TWM asked what our goals are. My husband has an idea about retiring at 55 and sitting on a beach. Won’t that be great…for six weeks? I think of all the things we’ve planned and fought over, that vision is actually the least realistic, but I frankly haven’t put much thought into it. I’m the first to admit, the point is probably having that option, though acting on it is another matter. Goals – life-long and short-term – were mentioned in the July comments, and I will try to set down my own as a financial exercise.

We’re both career-driven, both sets of parents are still working, happily, into their sixties (though they are financially set). You can see – this is a long road to financial happiness, and it’s not the money (or lack of it) standing in our way. There’s a fundamental divide in that it’s not even clear what we’re working towards, in terms of family plans (of course we have some concrete goals).

And there’s perhaps an even greater divide between my husband and I when it comes to attitudes towards money. He thinks I’m the prodigal wife; I think I’m reasonable. I think he’s needlessly frugal; he thinks we’re on the brink of bankruptcy. Is every couple like this? How do we reconcile these two solitudes?

My regular columnist, Mom2KG, checks in on how her family is doing so far this year after making a new year’s resolution to get their finances in order. As usual, she raises some questions which I hope you can help her with. Without further ado, here’s Mom2KG:

So, I’m learning this personal finance stuff is just not easy. I want to give you a round-up on how we’ve done since we started this new era of financial management and frugality. The results are lukewarm at best.

• Mortgage: This is the best part. We reduced our principal by 12.4% by maxing out on the weekly payments. If we’d paid only the minimum payments, we would have reduced the principal by only 3.3%. That’s about $1250 in interest we haven’t had to pay. This is in six months!

• Life insurance. Still not done…..

• Me: I have new job. Better pay, rigid but reasonable hours. Definitely a pay raise. I don’t start until mid-August, and I’m happy with the security and with the work.

• Investments: Well, this was going okay, until we received a call you never want – our financial advisor/manager called to tell us that the last five weeks had been very bad (not just for us) and we would see a big loss on our next statement. Well, at least he called. We’re going to meet with a new advisor this week, just to get second opinion.

• RRSP and RESP: Going well, as predicted. On track. By the way, should we count the RESPs as savings or as expenditures? I say savings, as it’s money we are putting towards something way in the future, that won’t have to come out of income then. My husband (ever the conservative) wants to count it towards our spending.

• Savings: This is the really bad one. In six months of attempted frugality, we have saved - $400! Basically, we’re where we were in January. We did have an unexpected tax bill, and I did take a last-minute trip to Vegas, but still. We’re so far from our goal we don’t know what to do. We just cannot seem to control our costs. Our burn rate is high on both fixed costs and consumer spending, and we can’t figure it out [TMW says: you have two young kids. They burn through money like they burn through clothes...]

On the consumer spending, I still feel we’re not going crazy…but the credit card statements beg to differ. I only see more spending coming up – new job means new clothes (I really do need some suits and shoes), as well as two friends’ baby showers in the near future. On the other hand, I can take the subway to work, so won’t be spending crazy money on gas.

My husband has (timidly) suggested a course of hyperfrugality – a really nice word for living cheap. I’m sort of interested in it as an experiment, but certainly not as a lifestyle. I think we’d do things like not buy any more clothes, alcohol, treats, dinners out, and eat only sale goods, and never turn on the AC or heat (sounds just great). No more dinner parties, or gas-guzzling trips to my in-laws’ cottage. We’ll watch our library of burned DVDs instead of going to movies and renting. No more nights out and babysitting. (Not that we did much of any of those things, but I suppose every buck counts.)

I will confess I’ve not been trying exceptionally hard to save money. By the end of the summer, we’ll have spent money on four trips (two for me alone). And, okay, screw you David Bach, but I’ve been buying my breakfast every day (come on! $2.37 at Tim’s is a bargain!) and often lunch. I’m not giving up the Tim’s but will re-double my efforts to bring a packed lunch to work.

Here is the real difficulty. We don’t have money to put into other personal finance options – we don’t want to touch the current savings as that’s our “emergency fund.” Let me ask another question – how necessary is a savings fund when we have two very stable, well-paying jobs? Does anyone think we could take some of that cash and buy something else? Would it be ridiculous to borrow from that fund to buy, say, stocks or a rental property?

I’m in quite a funk about this. What is perhaps the most difficult is the emotion attached to this. I’ve already said this a few times in my blogs, but I feel, well, it’s all my fault. I’m the one signing the credit cards, buying everything the family needs, which means I’m the one overspending. My husband is on a (very good) fixed salary, but I’m (was) an independent contractor, earning less, and, worse (from a financial perspective), sometimes choose to cut work short and come home to hang with the kids. Three fewer hours at work means that much less cash coming in. Looking for more words of wisdom and support, readers!

TMW comments: I am taking a first crack at this (hey, its my blog). I would define anything over and above your regular mortgage payments as savings. For example, if you have to pay $1000 month on a mortgage with a 20 year amortization rate and you raised your repayment to $1500, I would define that $500 over-payment as savings. I would suggest that you are low-balling your savings rate by not including all the extra mortgage payments your family is making. Readers- should extra mortgage payments count as savings?

I would also look at the budget. Is it remotely realistic for a family of 4 with young kids or is it reasonable and the fiscal discipline is missing? There should not be a general sense of fault without looking at why you are off at the end of each month. To be frank, is the strategy wrong (i.e. the budget) or the execution (following the budget)?

What do you also want in life? If its to retire at 45 then you need to address your short-term spending. If its to enjoy life then you have another set of priorities at play.

Readers?

My regular columnist, Mom2KG, checks in on the comings and goings of her family’s personal finance and why you should always stay sober at places designed to take your money.

Viva Las Vegas!

Vacations are lovely things. But a girls’ weekend in Vegas – that’s a whole different kinda lovely. I would like to share some lessons I have learned.

• Book early and do your research. Or, book really late. Either way, you’ll get better prices than booking about two weeks out, which is what I did. I got an okay price, but I know there are better prices available if you can wait until the last minute, or if you book the hotel and airfare together. Also, I never knew there were so many airline consolidators out there.
• Budget, and carry cash only to help enforce your pre-set limits.
• Check out everything online beforehand. Pretty much every restaurant, including menu and prices, are available. This helps with the budgeting (and the calorie intake).
• Don’t get too drunk. Drinks are free in the casinos and cheap elsewhere, and you can buy a drink and leave the bar, and even take it in a cab or shuttle! Drinking encourages stupid spending (anyone want to see my henna tattoo?), and can lead to other scary situations like getting kicked out of a bar (yes, even Vegas has its limits).
• Try to walk or take the shuttles. Cabbing is expensive.

Weekly Meetings

In other news, my husband and I have not been doing well with our weekly meetings. For a while it was because we were doing so well – things going according to plan, our to-do list well-executed – there wasn’t much to talk about. But it’s time to sit down again, I think, and re-visit our goals and budget. He recently also bought some more bank stocks. We now have DRIPs in three Canadian banks, and I have one in a major Canadian corporation, so we should talk about other investing options.

Mortgage or Investing?

One issue that came up with some friends lately was whether or not to pay off the mortgage quickly, or pay it off reasonably and invest the extra cash elsewhere. I have learned this is the personal finance version of if-a-tree-falls-and-there’s-no-one-to-hear-it-does-it-make-a-noise, and has passionately divided camps. We’re solidly on the side of paying off the mortgage. Our interest rate is low (and we all keep hearing that the bank rates are going to rise), which seems to me to be a great reason to pay it off – even less interest to pay. Our friends say, well, we’ll never get this much money on a loan at such a low interest rate again, so let’s put the money elsewhere and carry the mortgage a little longer. It’s an interesting question, and largely hypothetical – we won’t know until the end of our lives how we’ve done financially overall, and hindsight can tell us where we should have put our money. In the meantime, as a couple, we have set our strategy and are not going to waffle on it.

Life Insurance, or, Why Moms Rock

I am one step away from obtaining life insurance. If you have not considered this, do it! Stay-at-home parents will be shocked to learn their financial value to the household! Our provider showed us that my ability to be at home part of the time (as well as bringing in a salary) had a huge impact on how much insurance would be needed to “replace” me. I’d always (like every mom who also works outside the home) felt guilty about not “doing” as much with my career, even though I know very well how hard it is to take care of the kids. But now I can see that that choice benefits not just the family as a whole, but also our financial situation! (Now I just have to fill those damn forms out.)

On Monday, I speculated that oil prices may be subject to a bubble rather than real fundamentals. Sure enough, oil prices has fallen back to $126/barrel from its high of $134/barrel based partially on the belief that the prices are not warranted based on supplies and retail demand. I will continue to blog on oil prices as it is becoming the personal finance issue this year.

Without further ado, our regular guest columnist, Mom2KG, is back to update you on how her family is doing in meeting their personal finance goals.

Thank you to all who posted with suggestions on my budget and angst last month. There was a general consensus that there should be fun money, or a slush fund, the spending of which is free of guilt and restrictions. Setting this aside in the budget is a great idea. I was also relieved to hear about food costs being out of control for everyone. (It’s not just me!) There was also a post about averaging the fun money spending over a few months, rather than focussing on the pennies month to month. Thanks again.

Tax time – that was a good experience for me. I work on contract. My husband nagged me all through 2007 to put away money not just for GST remittances but my own taxes and deductions. My accountant did some fancy work in getting my taxable income down, and it turned out we had calculated the tax pretty well – in fact I had money left over. However, my husband was hit with a much bigger tax bill than we thought (something about allocating a bonus for 2008 but it still being taxed in 2007). So his nagging paid off, just not where we thought it would.

In other news, I also negotiated a raise for the first time ever. (I actually have two jobs, the contract one and a part-time permanent one. The raise was for the PT one.) I had not gotten a raise in four years (the company is cash-strapped, blah blah) so it was time. I got a whole speech ready, got my negotiating hat on….and got exactly what I wanted! I felt pretty good about that. I was a bit confused though – I gave my boss an opening number, and he asked “What’s your real number?” I thought he meant my bottom line, which I told him (and got). He said I should have given him a higher number as my “real number” than the opening gambit. Anyone know what he was talking about?

I’m also thinking about taking a new job. It would involve a significant raise. But there are downsides – I have a pretty good situation now where I can spend time at home if needed (e.g. a sick child), and my Fridays are a half-day of work at most. This is pretty sweet! The new job would still have predictable, reasonable hours, but would mean more work and less time at home, and certainly less flexibility. But then again, more money means hitting our financial goals sooner (which are a big priority, and will translate into more freedom). So let me pose a question – does everyone really have a price? How important is making more money, especially when we’re already reaching some lofty goals?

Mom2KG is our monthly columnist on TMW. Starting in 2008, her family has resolved to get a control of their financial house and every month she updates us on their progress. February’s report can be found here.  Today, Mom2KG muses about the cost of taking care of two young children. Take it away Mom2KG.

I’m astonished by how quickly I have gone from being wilfully blind to my family’s finances to being addicted to anything having to do with money management. And it took relatively little in the way of general reading to start to understand financial language.

The RRSP deadline has gone by. I put my money into a cash-holding RRSP from which I can make trades into something more exciting than mutual funds. I am putting about 40% into 5-year compounding GIC’s. It was going to be more but with the markets going down I’m looking for good stock buys (see-addicted!). I bought TD shares as well as Fortis, a great Canadian company regularly recommended and have enrolled in their DRIP programs (rumors persist Fortis will replace BCE on the TSX 60 when (if?) BCE goes private- TMW).

We’re following through on our savings commitments, so our bank accounts are getting nice and fat. We’re renovating the kitchen in the summer (and starting our budgeting and planning now), and once that’s done we’ll make a big mortgage prepayment. We intend to pay off the mortgage at the end of the term we just renewed, which makes things a bit tight. But we’re so excited the investment opportunities we’ll have when that income is freed up!

Just saw the news about the $5000 deduction for RESP contributions – we’re all for it! I hope that bill goes through.

I thought I’d write a little on the cost of babies and toddlers – also a good exercise for me to determine how much the little ones are draining from our coffers. We have two toddlers.

Maxing out RESP contributions: $208/month/kid=$416/month

Diapers: 4 diapers/day for toddlers (8-10/day for young babies). A giant pack of 144 Huggies is about $40. So we spend about $60-70/month.

Formula: Buy the no-name brands – great value. A President’s Choice ($12.00) tin will last a fully-formula fed baby 2 weeks, much longer than Nestle ($19.00). (Our kids just drink milk now, but formula was a huge expense during their first year.)

Milk: 4 litres (non-organic) is about $5.50. That lasts the family about five days.

Food: Hard to say. We are spending a little more, but buying much more, and less of the really expensive stuff you feel entitled to when you’re single (premium ice cream, exotic cheese). Groceries for us (family of 2 adults, two toddlers and one live-in nanny) is about $1000/month. This includes the milk, baby-centric toiletries and Disney-branded band-aids.

Live-in Nanny: $1700/month, plus a bonus last year of $600, plus occasional perks like buying her dinner if she babysits during the week – let’s say $200

Nursery school (one kid): Half day, three times a week - $290/month (and you pay even if you take your kid out for vacation)

Babysitting: We pay about $8/hour and feel cheap. A night of babysitting is about $50-65, about once a month.

Clothes: People will give toddlers boatloads of clothes for birthdays and holidays. Plus ours are the first grandkids in each side, so we’re spoiled. On the other hand, we’re the first in our group of friends to have kids, and our siblings have not procreated, so we’re the hander-outers of barely-worn clothes, and not the recipients. I shop cheap, at Joe Fresh and second hand stores, and I would say I keep the clothing expenditures to less than $500/year.

Toys: Ditto on the gifts from other people. We have spent about $700 for birthdays and holidays. Also figure in toys and clothes we give to other peoples’ kids, which I intuit we would not be doing if we didn’t have kids ourselves.

Cribs: We bought the first one brand new, nice and shiny and sterile for our little treasure, plus a change table and dresser - $1000. We bought the second one off Craigslist, no extra furniture, for $20 (the younger child gets screwed again- TWW). Crib mattresses were a total of $200. Plus bedding (for two cribs), and I went a little nuts at Pottery Barn late in my first pregnancy - $500. (I should add we had our kids really close together, necessitating two cribs – better planners would space out the kids more.) We were given a used toddler bed and mattress by a friend.

Gear: Premium stroller (not the Bugaboo Frog I coveted for $1000) plus carseat and base, on sale, $600. Two convertible carseats, $415 in total.

Entertainment: Family memberships to the Toronto Zoo and the Ontario Science Centre, $200 (well worth it). Birthday parties: about $500/year for our own kids.

Some of these expenses are ongoing, others are one-time only or annual. Most will only increase, such as the nanny and nursery school costs, and clothing costs. Eventually, we’ll have no more need for diapers, but I can’t see much to delete from the list. Notably, some things are impossible to quantify, such as how much extra we’re paying in water, electricity and gas because of the kids and the live-in nanny, and I have not even included an estimate. I was also exceptionally lucky to have had a total of four huge baby showers and received over $1200 worth of clothes, blankets, gear, books, and necessities for the babies.

It’s a lot, and makes cost control a challenge. I know TMW is not a political column, but thank god for socialized healthcare and workplace drug plans. My little dude has an ear infection, and it will cost me $3.15 in drugs, after the underwriting by the drug plan and whatever subsidy the government provides.

Last month I introduced a guest blogger, Mom2KG who is writing about her family’s quest to take control of their finances and become better money experts. Mom2KG is posting once a month and updating us on how her and her family are doing. January’s post can be found here. I am passing along her request to provide as many comments, suggestions and recommendations as possible since she found January’s comments so helpful.

Thanks to the readers of TMW who offered support and encouragement. It was interesting that the comments noted that my husband and I are doing more or better than a huge percentage of Canadians with our savings and investing. However, one can always do better, and our goal is to be as good at the planning and saving etc. as we can, not simply better than the masses.

One reason is that we have pretty lofty goals (I liked TMW’s blog on goals and tracking). The main one is to “retire” at age fifty, less than 20 years away. At that point, we’ll live off our savings while pursuing our “real” dreams. No doubt I’m going to get some flack for this plan. It’s a trite comment that the best way to make money is to find way to make money doing something you love. But we are conservative, with a combined fourteen years of postsecondary education we don’t want to “waste”. We are risk-averse, and simply not willing (or brave enough) to gamble on our incomes.

Having said that, the “dream” involves real estate, and we are getting on the road to investing in that area. We are progressing with one group in particular in a buy, rent and hold model. It’s slow going, but we are learning along the way.

We have gotten some basic stuff done, like maxing out the RESP contributions for the kids. We’ve been looking closely at our budget, and are determined to save a certain amount in cash each month as a priority. However, we keep blowing the budget and still have no idea how to control our spending. Seriously, we’re ramping up the potty-training with our kids so we don’t have to buy diapers anymore – is that ridiculous? Next I’ll be growing our own food in the backyard.

We will meet with our financial advisor next week, at which point I’m going to be pretty demanding about why in hell my RRSP portfolio (almost 100% mutual and money funds) has shown a dismal overall return of only 6% over the last 11 years! My husband started his only a few years ago and has consistently lost money (and his portfolio is in much less riskier funds than mine). And why hasn’t the advisor called about this? What’s going on? Oh yeah, I am ready.

I’m going to get out of mutual funds and into GICs for a bit. I like the “G” part of GIC. There’s no “G” in mutual funds. I note that if it were not for my newfound determination to involve myself more in personal finance, I never would have realized 6% ain’t so hot (actually, I probably wouldn’t have read my statements to realize this miserable fact). I used to think I just had to wait and wait and eventually I’d make money. [editors note: Mom2KG and I had a little discussion about asset allocation after I read she was going into GIC's. Maybe that will be next month's blog?!?]

As for our weekly money meetings, they’re going well. There was one moment involving an if-you-know-so-much-then-you-do-it. One great thing about having scheduled meetings is that any money issues coming up during the week can be noted and put away for our scheduled time. We’ve made some good progress in goal-setting (and achieving), both weekly and long-term.

TMW mused about whether men and women think about money differently. I’m not sure I can generalize based on gender, but I have noticed, among couples, that one tends to be the spender and the other is the anal retentive saver (no prize for guessing who is who in our marriage). No wonder couples divorce more over money than anything else. Notably, however, The Millionaire Next Door found that millionaire families almost invariably had partners with the same – frugal – attitude towards money. How nice for them. At least the rest of us support industries in second marriages, divorce law, and therapy.

(Mom2KG is TMW’s first regular guest columnist. Thanks Mom2KG. She has volunteered to write periodically on her household’s 2008 resolution to become better with money and investing. Here is her tale. I hope, if your resolution is the same, her thoughts echo some of your own. I hope you can all give her some suggestions).

Thanks to Thicken My Wallet for giving me a chance to share my financial resolutions of 2008. Actually, there’s just one resolution: get better at the money stuff.

My husband and I make what most people would be considered to be good money. Now, we do have two small kids, employ a full-time nanny, live in the most expensive city in Canada, and run a large house. We make our RESP and RRSP contributions, and are paying the mortgage down somewhat aggressively, but, other than that, we don’t do any financial planning. We were shaken to find we’d saved only 5% of our net income last year as cash. As a result, we’ve forced ourselves to make some real commitments to finding achievable financial solutions.

Learn more. I’m getting through Smart Couples Finish Rich. It hammers a few points that have motivated me. First, couples have to plan as a couple. Second, Bach encourages his readers to list the values they want in their lives, such as security, or health, or power, and then consider how money will help achieve those values, as opposed to things. (I think Bach has seen Fight Club several times.) My husband is reading Good Debt, Bad Debt because we are becoming more interested in investing. He’s particularly riveted by The Millionaire Next Door. The author emphasizes frugality, which echoes Bach’s Latte Factor theory of nickel and diming yourself out of significant savings opportunities.

Plan More. We’re committing to one meeting a week about money. Think of us next Sunday, at 1pm EST, when our kids take their afternoon naps. We’ll be sitting down to discuss past spending, goals, a weekly to-do list, and, eventually, the budget. Cross your fingers we don’t kill each other. By the end of January, we’ll have spent more time discussing money together than in all of last year.

Invest more. We’ve been talking about real estate investing for a number of years. Our first choices are student rentals or single family starter rental homes, and eventually build up to flipping. Also in this category is spending more effort on the basic investment vehicles, like RESP’s, RRSP’s, and insurance.

Spend less, save more. I manage the household, so I’m doing all the buying. When we continually go over budget, I feel it’s my fault, yet I’m hard put to see where I could have spent less. We don’t live hand to mouth, but we don’t take three vacations a year, or drive a Hummer, either. This will take some real teamwork, but we’re hoping the spending can get under better control, or at least within a reasonable expectation.

Like most New Year’s Resolutioners, we’re very motivated and excited right now. The weekly meetings should help, as should concrete rewards for meeting goals. Anyone out there have any suggestions for us? I’m especially interested in how to spend less.